June 5, 2026/InvestmentOne Report
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) paused on rate cuts at their second meeting in 2026, leaving the benchmark interest rate unchanged at 26.50. Notably, other policy parameters were also left unchanged in line with broad market expectations. We highlight that the decision reflects the impact of the ongoing Middle East conflict on global oil prices and the effect on inflation, which has risen over two consecutive months to 15.69%. However, the committee expressed confidence that the recent uptrend in inflation should likely be transitory, noting that the Nigerian economy is robust enough to restore disinflation.
Looking ahead, we expect trading momentum to remain muted and mixed, as investors continue to trade cautiously amid the lingering conflict in the Middle East. The spillover effect of global oil supply disruptions, even as the crucial strait of Hormuz remains closed, is expected to put upward pressure on inflation and delay monetary policy easing by the central bank of Nigeria.
Based on this view, we see fixed income yields hovering at current levels, with the possibility of yields pushing slightly higher.
We also expect the borrowing appetite of DMO in the primary market and investors demand to influence the direction of yields. Although we envisage modest cherry-picking by local investors on instruments with attractive yields, we still expect overall sentiment to be net bearish in June.
Kindly find HERE, the full report, covering our analysis and considerations.
